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Unusually harsh winter slowed the U.S. economy, and the U.S. Commerce Department’s final estimate of first-quarter GDP was revised downward from an annualized contraction of 1 per cent to a 2.9-per-cent rate. (Fred Lum/The Globe and Mail)

Unusually harsh winter slowed the U.S. economy, and the U.S. Commerce Department’s final estimate of first-quarter GDP was revised downward from an annualized contraction of 1 per cent to a 2.9-per-cent rate.(Fred Lum/The Globe and Mail)

The close: TSX manages small gain despite negative U.S. data
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The S&P/TSX composite index edged up 12.28 points to 14,974.65, led by gains in resource and industrial stocks.

The final revision to American economic growth in the first quarter showed that U.S. gross domestic product shrank 2.9 per cent. That was larger than the two per cent contraction economists had expected. However, the decline was due in large part to severe winter weather and the damage to the economy was expected to be short-lived.

“It doesn’t matter what we throw at the market, it seems to just show its resilience and deflect it,” said Kash Pashootan, portfolio manager at First Avenue Advisory, a Raymond James company, in Ottawa.

“So we have seen uncertainties from Russia/Ukraine, from Iraq, economic data that hasn’t been overly exciting. In fact, we saw U.S. GDP numbers . . . (that were) really disappointing and it had no impact on the markets at all.”

Other data showed that U.S. durable goods orders fell one per cent in May, against an expected one per cent gain. The drop was driven by sharp reduction in demand for military equipment.

The Canadian dollar ticked up 0.19 of a cent to 93.27 cents (U.S.) as the greenback weakened in the wake of the data.

U.S. indexes were higher with the Dow Jones industrials ahead 49.38 points to 16,867.51, the Nasdaq up 29.4 points to 4,379.76 and the S&P 500 index advancing 9.55 points to 1,959.53.

The gold sector rose about 0.55 per cent as August bullion added $1.30 to $1,322.60 (U.S.) an ounce.

Oil prices edged up 47 cents to $106.50 a barrel. Prices have advanced steadily over the last couple of weeks amid a rising insurgency in Iraq but stepped back over the last two days as fears receded that the insurgency would greatly affect the country’s oil production and exports.

The TSX energy sector was ahead 0.17 per cent.

Support also came from the industrials group, up 0.3 per cent.

The base metals sector was the major decliner, down 1.56 per cent even as July copper rose two cents to $3.17 a pound. The base metals sector has been a major decliner, losing about half of its gains for the year over the past month.

At the same time, indexes in Toronto and New York are close to record highs and investors wonder where the next catalyst is coming from. Also, inflationary pressures are building, raising concerns about when the U.S. Federal Reserve might boost interest rates.

On the corporate front, Pengrowth Energy Corp. announced a doubling of the value of its proven reserves at its flagship Lindbergh bitumen project in Alberta from $1-billion to $2-billion (Canadian). Pengrowth shares advanced 14 cents to $7.46.

In the U.S., General Mills Inc. posted quarterly earnings of $404.6-million (U.S.), or 65 cents per share. Excluding one-time items, it earned 67 cents per share, which was below the 72 cents Wall Street expected. Total sales declined three per cent to $4.28-billion, which was also below the $4.42-billion analysts expected and its shares fell 3.6 per cent to $51.76.

And CBS and other TV companies advanced after the U.S. Supreme Court ruled that startup Internet company Aereo would have to pay them when it takes television programs from the airwaves and allows subscribers to watch them on portable devices. CBS rose 6.19 per cent and Walt Disney, which owns ABC, rose 1.48 per cent.

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